Taylor Devices Inc reported Q3 2025 results with revenue of $10.56 million, down 13.8% year over year but up 172% quarter over quarter from Q2, signaling a sharp quarterly rebound amidst a softer year-over-year demand base. The quarter exhibited solid profitability with gross margin of 42.9% and operating margin of 19.1%, producing net income of $2.00 million and earnings per share (EPS) of $0.64. Cash generation remained robust, as operating cash flow reached $9.02 million and free cash flow was $8.84 million, underpinning a net cash position of approximately $2.30 million and substantial liquid investments. The balance sheet remains strong, with total assets of $70.15 million, total stockholders’ equity of $57.80 million, and a healthy liquidity profile (current ratio 4.57, quick ratio 3.86). However, the company continues to show a stretched working capital cycle, evidenced by a sizable change in working capital of about $6.50 million, and relatively slow inventory turnover (0.686x) with long days sales outstanding (84.7 days) and inventory days (131.3 days).
From a strategic lens, management’s commentary is not captured in the provided transcript for QQ3 2025, limiting explicit guidance. Nonetheless, the earnings base demonstrates meaningful operating profitability and liquidity, paired with disciplined capital allocation (minor stock issuance and modest buybacks; significant investment purchases). The valuation backdrop shows a modest P/E around 13x and a P/B near 1.80x, suggesting a balance of leverage to profitability and downside protection from strong cash flow generation for a small-cap industrial supplier.